ARCHIVED - Order CRTC 2001-4

Order CRTC 2001-4

Ottawa, 11 January 2001

Changes to reporting requirements of class A licensees

Reference: 8628-C12-02/99

The Commission will no longer require class A licensees to file quarterly reports of basic international traffic. The Commission will not publish the route-specific traffic data already filed. The Commission notes, however, that the question of future monitoring mechanisms is the subject of another process.

In Regulatory regime for the provision of international telecommunications services, Telecom Decision CRTC 98-17, dated 1 October 1998, the Commission required class A licensees, i.e. carriers that operate telecommunications facilities, whether owned by them or leased from a separate facilities provider, used to transport basic telecommunications service between Canada and other countries, to file quarterly reports of basic international traffic, for inbound and outbound volumes, by country of origin and destination. The Commission considered the reports would indicate distortions in traffic flows that may indicate anti-competitive conduct. The Commission also was of the view that individual service providers may not detect anti-competitive conduct from changes in traffic volumes, as such changes may result from many other factors.

The applications

Following the release of Decision 98-17, the Commission received several applications pursuant to Part VII of the CRTC Telecommunications Rules of Procedure and the Telecommunications Act:

• Teleglobe Inc. applied on 29 April 1999 requesting that the traffic data by country of origin and destination be kept confidential;
  

• Société internationale de télécommunications aéronautiques S.C. applied on 13 August 1999 requesting that class A licensees should be required to report only contribution-eligible traffic, and that if this is not now the case, then the class A licence conditions should be amended; and
  

• Teleglobe Communications Services Inc. applied on 17 August 1999 requesting that licensees with no traffic to report should not be required to file quarterly traffic reports.
  

In addition to the applicants, Bell Canada, Call-Net Technologies Services Inc., Equant Canada Inc., Equant U.S. Inc. and TELUS Communications Inc. filed comments or reply comments in this proceeding.

The issues

The applications raised three issues related to the traffic reports: first, whether the quarterly traffic reports provide information that can be used to detect anti-competitive conduct; second, whether some carriers may be exempted from the requirement to file the quarterly traffic reports, and if not, whether they should be required to file nil reports; and third, whether the traffic reports should be confidential, that is whether the potential harm that publication might cause Canadian carriers outweighs the potential benefits from publication.

Quarterly traffic reports

Parties agreed that the quarterly traffic reports of basic international minutes are not necessary and not accurate enough to detect anti-competitive conduct. Parties expressed the view that the Commission has other means to detect anti-competitive conduct, such as the applicants' ownership, corporate affiliation, and contractual arrangements and the requirement that class A licensees preserve information in an auditable way.

The Commission is of the view that quarterly reports of basic international traffic would be of insignificant benefit in detecting anti-competitive behaviour. Because of hubbing, anti-competitive traffic routing may not be apparent in the traffic reports. Further, the traffic reports would not indicate anti-competitive behaviour related to pricing and terms and conditions of carriage. The Commission considers that the Commission could obtain this information through examination of agreements that all carriers must file with the Commission.

Accordingly, the Commission is of the view that the filing of quarterly traffic reports is not necessary, and the Commission will amend the conditions of licence for class A licensees. With Monitoring the Canadian telecommunications industry, Public Notice CRTC 2000-175, dated 15 December 2000, the Commission has initiated a proceeding to establish more effective monitoring mechanisms which could include provisions dealing with class A licensees. Class A licensees should retain the quarterly data on basic international minutes until the requirements of that process have been determined.

Filing requirements and nil reports

The issue of whether the quarterly traffic report filing requirements should be the same for all carriers, or whether nil reports should be filed, has become moot, since the requirement for filing quarterly traffic reports with the Commission will be discontinued.

Further, in Changes to the contribution regime, Decision CRTC 2000-745, dated 30 November 2000, the Commission has reduced the regulatory burden for small carriers. As indicated in that decision, class A licensees with contribution-eligible revenues of less than $10 million annually are exempt from paying contribution. However, class A licensees are required to comply with the reporting requirements and procedures described in paragraphs 105 and 106 of that decision, in addition to the other reporting requirements set out in their conditions of licence.

Confidentiality of the traffic data

Parties submitted that publication of the traffic reports on a route by route basis might cause specific harm to Canadian carriers. For example, traffic imbalances indicated in the traffic reports may lead to changes in accounting rates, induce foreign service providers to rely on their affiliates to terminate Canadian traffic, or to hub traffic terminating in Canada through the United States. Further, Canadian carriers could be at risk of direct specific harm if Canadian authorities publish more disaggregated traffic information than foreign authorities, so that foreign carriers, particularly foreign monopoly carriers, would have better information than the Canadian carriers with which they compete to carry international traffic. Such information imbalances might harm Canadian carriers when negotiating agreements with foreign carriers.

Further, parties submitted that the aggregate traffic reports by originating and terminating country are likely to disclose traffic information for routes served by only one or two carriers. As Teleglobe pointed out, traffic volumes of competitors can be identified if there are fewer than three competitors on a specific route. Teleglobe suggested that the Commission should not publish the traffic information by originating and terminating country, but only the totals of inbound and outbound volumes.

In light of the foregoing, the Commission considers that publication of the traffic data may cause harm to Canadian carriers. Further, the Commission is of the view that there would be no or very limited benefits from publishing the traffic information, in view of the likely inaccuracies discussed previously. Considering the small benefits, and the potential harm, the Commission has determined not to publish the traffic information currently before the Commission, and any other traffic reporting information filed by class A licensees filed pursuant to Decision 98-17.

Conclusion

In light of the foregoing, class A licensees are instructed:

• not to file quarterly reports on basic international traffic for traffic subsequent to the third quarter of 2000;
  

• to retain the quarterly data on basic international minutes until future reporting requirements have been determined in the proceeding initiated byPN 2000-175; and
  

• to file annually with the Commission an affidavit made by a senior officer of the licensee attesting to whether they carried basic international telecommunications traffic during the year, and whether they are exempt from paying contribution pursuant to Decision 2000-745.
  

Class A licencees will shortly receive a list of amended licence conditions from the Commission.

 

Secretary General

This document is available in alternative format upon request and may also be examined at the following Internet site: www.crtc.gc.ca